Ecommerce agency fees in China: compare retainers, sales commissions and reimbursed spend
Compare China ecommerce agency retainers, sales commission bases, refund true-ups and reimbursed advertising spend.
Two ecommerce agency proposals can have very different economics even when they appear to charge the same percentage. Compare the services delivered, the sales base used for commission, the treatment of refunds, and who pays advertising or other third-party costs. A lower percentage on a larger base plus a higher retainer may cost more.
For an overseas finance team reviewing a China store, first identify the contracting legal entities, the store and advertising accounts, currency, reporting period and payment routes. Keep the platform's original Chinese field names beside their English explanations: an order amount, a settlement and a bank payment are different records.
Separate three layers of one quarter's costs
Assume one domestic store has RMB 50 million of delivered order value for a quarter, including VAT. Within 30 days after delivery of each order, customers complete RMB 6 million of refunds. There are no other discounts, subsidies or price adjustments. Both proposals provide the same services and quality. Commissions are settled after the final order's observation window, and all compared amounts have been paid; the batch total is not necessarily one calendar quarter's cash flow. All amounts are VAT-inclusive cash amounts in renminbi.
- Proposal A: a RMB 1.8 million quarterly retainer plus 3% of delivered order value. Under this assumed contract, later refunds do not reduce A's commission.
- Proposal B: a RMB 600,000 retainer plus 5% of delivered order value net of refunds completed within that 30-day observation window.
- Each arrangement incurs RMB 7.5 million of actual advertising spend. Under A the agency advances it and the brand reimburses the verified amount; under B the brand pays the advertising platform directly. Assume no other charges or interest.
| Item | Proposal A | Proposal B |
|---|---|---|
| Commission base | RMB 50.0m | RMB 50.0m − 6.0m = RMB 44.0m |
| Sales commission | RMB 50.0m × 3% = RMB 1.5m | RMB 44.0m × 5% = RMB 2.2m |
| Retainer + commission | RMB 3.3m | RMB 2.8m |
| Same advertising spend | RMB 7.5m reimbursed | RMB 7.5m paid directly |
| Total cash paid for the batch | RMB 10.8m | RMB 10.3m |
On these assumptions B charges a higher commission rate but RMB 500,000 less in combined agency fees. A contract should also state how refunds occurring after the observation window will be reconciled. Different sales volumes, refund timing or service levels can reverse the comparison.
Count the advertising payment once. Under A, do not add the same RMB 7.5m again as a separate cash payment after recording the reimbursement to the agency. Cash top-ups and actual advertising consumption can fall in different periods; see Tmall ad balances and expenses.
Make the commission base reproducible
Before signing, reconcile a sample of actual orders and settle these points in writing:
| Question | Decision to document |
|---|---|
| Which orders qualify? | Ordered, paid, shipped or received; treatment of cancellations, exchanges and suspicious orders |
| Which amount? | VAT-inclusive or exclusive; delivery charges, merchant discounts, platform subsidies and channel commissions |
| How are refunds handled? | Partial and cross-month refunds, rejected deliveries, observation period and subsequent true-ups |
| Who reconciles? | Platform order IDs, settlement statements, agency calculations, disputes and final approval |
| When and to whom is money paid? | Deposits, service invoices, settlement dates, payment dates and authority for collection or payment by another entity |
“GMV”, “gross sales” and “net sales” are not self-defining across systems or contracts. Specify the source fields and formula. The agency's report and the platform's settlement statement may also have different cut-off dates.
Reimbursement is not automatically an agency service fee
For every charge, identify the service or goods, purchaser, payer, recipient, authorization and evidence. A platform selling advertising to the brand is a different factual arrangement from an agency buying a service and supplying its own service to the brand. Match the agreement, agency statement, third-party records, proof of payment and invoices. The correct invoice, accounting treatment and input-VAT eligibility depend on the actual transaction and applicable rules, not on the label “reimbursement”.
For contracts governed by PRC law, Article 470 of the Civil Code lists common terms such as the parties, subject matter, price, performance and dispute resolution; the actual relationship determines whether a mandate or other contract rules apply. Article 14 of the Accounting Law addresses obtaining and reviewing original accounting evidence. Neither source supplies the parties' commercial commission formula.
Compare the proposals beyond the headline fee
- Equivalent delivery: identify the team, customer service, content, design, live commerce and ad-management work included, plus charges for out-of-scope work.
- Sensitivity: calculate low, base and high sales and refund scenarios rather than assuming one quarter will repeat.
- Control and handover: establish ownership of store and ad accounts, data and creative assets, approval rights, spending limits and end-of-contract access.
- Cash timing: place retainers, advertising advances, reimbursements and refund true-ups on a payment calendar. Cash outflow and accounting expense are separate questions.
Finance and the operating team can use the contract, order and refund detail, settlement statement, advertising records and payments to assign unresolved items. For a related decision, read how to assess a livestream collaboration's contribution, or contact CaiGeek, an AI financial assistant for small and medium-sized businesses.
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